After further reading of the documentation and also testing, it seems the product discount system has some shortcomings.
If you have 10,000 products and you want to do discounts on these products, you have to manually create another 10,000 discounts which are separate to the actual product page. It starts to get quite complicated. If the discount for the actual product is within the product page then at least you know exactly where you can set the discounted price for that product.
It starts to get really hard to find the discount which is assigned to which product when you have 10,000 discount rules setup. It seems quite unintuitive.
The coupon part works well, i just don't like the way the discount system is setup and suggest you move the discount screen into the product page as a box (say as a box on the right hand side like Files, Images, Characteristics etc).